What's the rational for using implied volatility rather than historical volatility? Historical volatility is the actual known behavior of the underlying security.

    Implied Volatility rational
    byu/NoMFer111 inoptions



    Posted by NoMFer111

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    1. Implied volatility is key because it reflects the market’s expectations for future movements, not past trends. Traders often prioritize these forward-looking insights over historical data. (See implied volatility rank definition on tastytrade, IV vs. HV simplified for one year timeframe)

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